A British energy firm has revealed it may be sitting on significantly more gas than previously thought following a study of its prospective shale gas deposits in northern England.

IGas had previously said it had about nine trillion cubic feet of shale gas. It now estimates that its licence to explore areas in the North West could contain more than 170 trillion cubic feet of shale gas.

The figure would put it close to the same league as rival Cuadrilla Resources, which has estimated prospective reserves of at least 200 trillion cubic feet (tcf).

IGas said that technical studies helped it to reach an estimated range of between 15.1 tcf and 172.3 tcf for gas in the region, with a most likely estimate of 102 tcf.

Chief executive Andrew Austin said that only some of the gas would be recoverable from the area but nonetheless the potential volumes could change Britain's energy balance.

"The announcement of the gas in place volumes of up to around 170 tcf in our North West acreage follows the completion of a very thorough study by the IGas Technical team and supports our view that these licences have a very significant shale gas resource with the potential to transform the company and materially benefit the communities in which we operate.

Shale gas is extracted by the controverial technique of fracking

"The planned drilling programme, commencing later this year, will further refine these estimates and advance our understanding of this shale basin.

"We will in due course carry out further analysis and reinterpretation of existing seismic and subsurface data to evaluate the potentially prospective shale resources in the East Midlands and Weald Basin licence areas," he said.

The company is one of the UK's hydrocarbon producers. Its licences cover an area of 300 square miles across Cheshire.

Shale gas is extracted by fracking - a controversial process that involves pumping a mixture of water, sand and chemicals underground to deliberately crack sedimentary rock and extract oil and gas.

Campaigners opposed to the method say it risks polluting water supplies and makes damaging earth tremors more likely.

Britain's domestic supplies of gas have been declining since the mid-2000s as fields run out of reserves.

In his March Budget, the Chancellor announced incentives for an expansion of fracking technology in Britain.

Prof Richard Davies, of the Durham Energy Institute, said: "We should not get too excited about huge shale gas resources.

"Bear in mind that we have one fracked shale gas well in the UK so far and in terms of scale, this is a little like sticking a pin into the ceiling of a very large room, it tells you very little about what's in there. It's the percentage that can be extracted (the reserve) that is the critical thing. If the geology is right then economics and social acceptability determine the eventual size of the prize."